Euro oil/products: Gasoline, distillate cracks rally as Brent tops $117/b
Quantum Commodity Intelligence - Spot distillate cracks jumped to a two-week high, while gasoline cracks hit a fresh record as the EU pushed on with its embargo while the US gasoline import demand jumped on a day when Brent topped $117/b.
Spot gasoline cracks gained nearly $2/b to $46/b and diesel cracks rose $3/b to $42/b, while cracks for naphtha, LPG and fuel oil fell by the European close Thursday.
The June ICE low sulfur gasoil futures were up nearly $50/mt on the day to $1,160/mt, while the backwardation continued to steepen to $37.25/mt.
Products
A naphtha cargo – excluding Russian origin – was bid at -$1/mt versus June swaps, keeping the assessment at par to June swaps at $872.75/mt, up $20/mt. At the same time, Totsa offered down an open-origin cargo for June 5-9 dates to -$5/mt to June swaps which was excluded from the assessment. Spot propane cargoes were pegged at $9.50/mt over June swaps or $756.25/mt, up $25.75/mt on the day.
Eurobob gasoline swaps rallied for a second straight day amid a tightening US market which is spurring transatlantic exports, driving spot cracks in Europe to fresh highs of +$46/b. June swaps gained $37.25/mt by the 1630 close to $1,289/mt. Traded volumes remained muted with E5 trading 3,000 mt at an average diff to the June swaps of $49/mt, while the E10 diff jumped to $70/mt by the close – implying strong US import demand for European volumes – with a further 7,000 mt traded. Premium unleaded was offered at $1,377/mt, while there were no indications for MTBE, keeping its factor to E5 static at 1.27.
Offers for diesel barges were unchanged for a third straight session at $10/mt over June LSGO with the diff over the distillate contract sliding to $4.75/mt, while 50ppm and 1,000ppm barges diffs also retreated. Market activity picked up in the northwest European diesel cargo window with seven bids, four offers and one trade. The most competitive open-origin bid was into Immingham for a June 5-20 cargo at $14/mt over June LSGO which was hit as Glencore sold to Trafigura. Nearby, Trafigura bid the Thames for similar dates at $8/mt over June while Amsterdam was bid at $5/mt over June. Bids restricting Russian origin into Thames reached $32.75/mt over June. The sharpest offer into Hamburg was from Glencore at $36/mt over July LSGO for a late June cargo while Amsterdam open-origin was offered at -$21/mt versus the paper market, equivalent to $1,171.50/mt. In the Mediterranean, Repsol offered down Lavera to $40/mt over June 15 pricing, or $1,162.75/mt.
The premium of jet fuel cargoes over front-month low sulfur gasoil futures dipped back below the $100/mt level for the first time in a month with supply improving as European refiners ramp up. An offer from Glencore into Le Havre for a June 10-14 cargo at $19/mt over June 6-10 pricing was lifted, equivalent to $1,259.25/mt. Elsewhere, BP bid the Isle of Grain at $19/mt over May 30 pricing, or $1,270/mt, Unipec bid Rotterdam at $80/mt over June LSGO and Hartee bid Ghent at $17/mt over June 8 pricing. Jet barges traded on the offer at $118/mt over June LSGO, with bids reaching to $107/mt.
Fuel oil 3.5% barges failed to attract any buying interest with offers reaching as low as $643/mt. The spot was assessed $9.75/mt higher at $638.50/mt, following swaps higher and with cracks slightly weakening. Marine fuel 0.5% traded twice on the bid at $810/mt versus offers at $816/mt. spot prices were assessed $27.75/mt higher at $815.75/mt, boosting cracks.
